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News


Grave concerns over proposed loan for CEB

 Power and Energy Minister John Seneviratne has solicited a US$500 million loan from an unknown entity, claiming to salvage the CEB from its present impasse. This move could push the country down a precipice of international financial terrorism, The Nation learns.

The Minster had informed the cabinet of ministers that the authorised agent, The North Face Limited, had proposed this long-term loan at 2% simple interest per annum, payable at the end of five years, along with the capital.

An authorisation letter from the lender, M/s. Zhong Qi Shi Mao Investment Company to the agent however, specifies that the loan is subjected to the issuance of a Sovereign Bank Guarantee by the Sri Lankan Government, for the entire loan amount.

The Minister’s appeal to the cabinet to consider the loan proposal comes in the wake of a strong warning issued by the Central Bank Governor on January 30, on the imprudence of considering such offers.

“It is our view that if a ministry or an organisation were to offer a bank guarantee, it may perhaps be used to raise funds abroad from various illegal sources, including funds connected to terrorist financing and/or money laundering,” the letter cautioned.
Meanwhile, the Central Bank has observed that neither the authorised agent The North Face Ltd. nor the principal lender M/s Zhong Qi Shi Mao Investments Company, are in a position to finance such a cumbersome loan.
(See full story )

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